Daily Market Update

Overview

Although it initially did not affect the Dollar much, in the absence of other concrete economic developments throughout the day, it helped turn Buck’s fortunes into positive territory. FX markets as a whole, however, remain quiet ahead of Easter holiday closures around the world.

Once again, the biggest news in the FX world came out of Japan as JPY briefly crossed through its weakest levels against USD all the way back in 1990. This, of course, immediately prompted strong verbal warnings from Japan’s top currency officials, who are kicking the door toward real intervention further open. Important to note, however, is that Japan’s currency officials are much more concerned with what they see as outsized movement and speculative positioning rather than the actual price of JPY, which they do admit is still cause for a bit of alarm. Nevertheless, Masato Kanda said overnight that he would take “bold measures against excessive moves” in the Yen, and he and BoJ head Kazuo Ueda are “not ruling out” any options – language that in the past has been a precursor to real intervention rather than just further jawboning. As a result, JPY clawed back a bit of ground in overnight and early trading but still remains close to historic lows, and the potential for intervention remains high. This, of course, is impacting all currencies in the region, notably the Chinese Yuan, whose authorities are also attempting to bolster.

Ahead of US PCE data for February on Friday, which will be followed by a speech from Fed Chair Jerome Powell, many major economies around the world are headed into closures for Easter. Mexico’s banks, along with many other Latin and South American banks, will be closed on Thursday and Friday of this week. European and UK banks will close Friday and Monday, April 1, and Canadian and Antipodean banks of Australia and New Zealand will close Friday as well.

What to Watch Today…

EUR ⇓

After making an attempt to break out of its ranges of the last few months early last week, the single currency has returned to familiar price action and has slipped against USD once again this morning, bringing it down closer to the bottom of its pricing this month. Though Eurozone consumer confidence did manage to improve slightly this month, likely due to a bit of an uptick in industrial production, the economic region’s prospects are still headed more toward stagnation rather than real tangible growth. The European Central Bank appears to be looking toward June for its first interest rate cut.

SEK ⇓

Swedish Krona posted fairly heavy losses against USD through yesterday’s trading session, placing it near the bottom of the G10 board. Sweden’s Riksbank met yesterday, and though the central bank elected not to cut interest rates just yet, officials did highlight that they expect to be able to ease policy as soon as May should the inflation outlook remain in line with their expectations rather than resurge as we’ve seen in some nations early this year. As Sweden’s economy remains in a recession, this could offer the nation some much-needed respite.